At the end of last year, Peach Aviation, a Japanese Low Cost Carrier, has announced that it would launch a monthly subscription campaign for unlimited domestic flights operated in February, which will be the first subscription service for airline tickets in Japan. However, airlines in China have already launched massive airfare promotions when China has largely contained the COVID-19 pandemic in May 2020.
China’s first “All You Can Fly” airfare package, “Wild Your Weekend” which allows passengers to enjoy unlimited weekend flights until Dec. 31, 2020, was launched on June 18, 2020 at RMB 3,322 (about 50,000 yen). It’s redeemable for an unlimited number of domestic flights in economy class, except for Hong Kong, Macau and Taiwan, on any weekend through the end of 2020. As of June 30, the product has been sold more than 100,000 sets, with total revenue expected to be more than RMB 300 million. And its second generation product has been launched in October 2020 and will be valid until June 27, 2021. Following China Eastern Airlines, Hainan Airlines and other domestic airlines also launched a variety of discount packages, and the validation of the redemption of some new packages is set to the end of March 2021.
The “All You Can Fly” products currently available from various airlines can be divided into two main categories. The first category is China Eastern Airlines’ “All You Can Fly” product. Whether it is the first generation of “Wild Your Weekend” or the second generation of “All You Can Fly in early morning and late evening”, the market segmentation is categorized based on the time. For example, the design logic of the weekend flight product is to fill the empty seats in the “off-season” market or in the case of insufficient demand, while not affecting the travel choices of business travelers and motivating leisure travelers who are “price-sensitive but not time-sensitive”.
The second category is Hainan Airlines’ “All You Can Fly” product, which is valid only to specific destinations but no date restriction. The first generation of this product is limited to routes where the origin or destination airport is in Hainan Province. One of the aims is to promote consumption in Hainan Province since there are duty-free stores in Hainan that are subject to the offshore duty-free policy, allowing customers to purchase brand goods and other items at duty-free prices without having to go abroad.
The “All You Can Fly” products have a more profound meaning for the airline industry in addition to the direct sales revenue, which is to restore long-term market confidence with limited costs. In terms of stimulating travel demand, “All You Can Fly” has already shown a very obvious positive effect. As of mid-October, users have made 2.5 million trips with China Eastern Airlines’ “All You Can Fly” product, and the most frequent user has completed 80 flights. “All You Can Fly” has also played a role in helping brand marketing and cultivating users’ habit of booking tickets directly from airlines. Overall, “All You Can Fly” is a win-win product for both airlines and consumers. The demand for air travel is no doubt weaker than before the epidemic, and the competition between large companies is coming at an early stage, and a product like “All You Can Fly” will help improve consumers’ choice in the future, and enhance the airline’s brand, which is probably what China Eastern Airlines will value.
The Chinese airline industry has never experienced such a long and massive reduction of capacity before, but with the emergence of “All You Can Fly” and other products that stimulate travel demand and with the gloom of the pandemic gradually lifting, the airlines will gradually return to their normal operation and revenue levels. It is generally believed that the “All You Can Fly” products have a positive effect on airline performance during the pandemic – consumers are getting a good deal, and the demand for air travel is being stimulated, which leading to a good promotion. In addition, like Hainan Airlines’ case, it provides the travelers with the possibility of new destinations, being a valuable new initiative during this special time of year. Japan’s tourism industry is also going through a difficult time, but we hope we can overcome it with wisdom.(YUI)
Source: Kyodo News PR Wire